Plugging the pensions gap

The government has proposed a series of measures intended to fill the gaping void in the funding of pensions. But the proposals threaten widespread upheaval in the credit market if ratified in their current form. Saskia Scholtes reports

As the nation’s 76 million baby boomers approach retirement age, it’s little wonder that a yawning asset-liability mismatch in America’s pension system has become a major concern. Corporate pension plans are underfunded by around $450 billion at a time when demands on the system will only increase and contributions decline. In 2004, the government agency that insures pension schemes, the Pension Benefit Guarantee Corporation (PBGC), was itself underfunded to the tune of $23 billion—the result of